What is peer to peer property lending?

Peer-to-peer lending, often abbreviated as P2P lending and also known as crowdfunding, is the practice of lending money to individuals or businesses through online services that match lenders with borrowers. In simple terms, it is matching people who want to invest with people who want to borrow.

Peer-to-peer lending companies like Lendy tend to operate online, which means they can run their operations with lower overheads and provide lending services more cheaply than traditional financial institutions, by effectively cutting out the middle man.

As a result, lenders can earn higher returns compared to savings and investment products offered by banks, while borrowers can borrow money at lower interest rates. The P2P lending company makes it money from taking a fee for providing the match-making platform and sourcing the investment opportunities. As with all types of investing there is the risk of the borrower defaulting on the loans they've entered into.

Compared to stock markets, peer-to-peer lending tends to have less volatility.

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Lendy Ltd ("Lendy") is a company registered in England and Wales under number 8244913 with its registered office and principal place of business at Brankesmere House, Queens Crescent, Southsea, Portsmouth, PO5 3HT. Lendy Ltd is authorised and regulated by the Financial Conduct Authority (FCA), number 654326, and is registered with the Information Commissioner's Office (ICO), number Z3404040.

All loans made through Lendy's platform are secured on UK property; however, your capital is at risk should a borrower default. Funds lent through a peer-to-peer website are not covered by the Financial Services Compensation Scheme (FSCS). Whilst no Lendy investor has been subject to any loss of capital, past performance is not a guarantee of future performance. Please obtain independent advice if you are in any doubt as to whether this platform is suitable for you or if you require tax advice. Please review our Please review our full risk assessment here.